‘This is becoming the Fyre Fest of crowdfunding’: Anger grows as PledgeMusic owns up to late payments

Direct-to-fan platform PledgeMusic has issued a statement today (January 24) accepting responsibility for late payments to “many artists” in the past year – as anger bubbles over amongst independent acts and labels.

The manager of one well-known American indie rock band told MBW today that the PledgeMusic late-payment fiasco is now, in his view, “becoming the Fyre Fest of crowdfunding – seriously”.

That, obviously enough, is a damning reference to 2017’s ill-fated ‘luxury’ Fyre Festival event in The Bahamas, whose reputation has now been sealed in a much talked-about Netflix documentary.

PledgeMusic’s admission follows severe criticism from many of its users over the past year. The company has now written of its “deep regret” and acceptance of responsibility for the fact that it has been “late on payments”.

Additionally, the firm claims to be “in discussions with several strategic players in the industry who have interest in the PledgeMusic platform”.

Pledge says that details of these potential transactions will be revealed in the next 60 days, and that it “expects” all outstanding payments will be made in the next 90 days.

“We deeply regret that recently we have not lived up to the high standards to which PledgeMusic has always held itself. We acknowledge that many artists have and continue to experience payment delays. These delays to artists are unacceptable – not only to them, but to us.”

Pledgemusic

In October last year PledgeMusic’s Co-Founder Malcolm Dunbar was promoted to Global President and COO in the wake of former CEO Dominic Pandiscia’s exit from the company.

Following PledgeMusic’s public acknowledgement of late payments to its artists today, one of the company’s Co-Founders Benji Rogers also issued an apology, addressed to “artists, their teams, managers, labels and fans, and to all who have been negatively affected by the issues at PledgeMusic”.

“I am truly sorry to any and all of you who have been harmed as a result of what I made.”

Benji Rogers

Said Rogers: “I am truly sorry to any and all of you who have been harmed as a result of what I made.

“Please know that I will do all that is within my power to make it right and to fix what I can if given the opportunity to do so.”

Added Rogers: “Even though I handed over day-to-day control of Pledge as its CEO for the second time in April of 2016 and left the board last February, the fact that this trust is now broken is unacceptable to me personally and I am truly sorry to all of you who have been affected by this.

“I have emailed a lot of you from my personal email account, as I no longer have a Pledge email address, and have tried to help where I can, but it’s not enough.”

You can read PledgeMusic’s statement in full below:

PledgeMusic has always been committed to serving artist and fan communities. It was established by artists and was born of a need to change the way in which the traditional music industry operated. It was designed to help artists and their teams at every level, and we believe that PledgeMusic has become an essential part of the evolving landscape of the music industry.

That said, we deeply regret that recently we have not lived up to the high standards to which PledgeMusic has always held itself. We acknowledge that many artists have and continue to experience payment delays. These delays to artists are unacceptable–not only to them, but to us.

Since its beginning, PledgeMusic has successfully serviced over 45K artists from emerging acts to some of the biggest names in the industry. We’ve supported 60 Grammy-nominated artists and helped springboard 100s of unsigned bands to successful careers. Our efforts have assisted over 375 artists with chart position on the Billboard Top 200. Our platform has provided close to $100m of revenue to its artist community.

Mid 2017, new investors came into PledgeMusic with the goal of strengthening the company and improving the value proposition for artists and fans. After substantial investments in the business over the past 18 months, we believe we have made good progress to that end, but it hasn’t been enough. That said, the company has cut its operating expenses nearly in half over the past year. We’ve overhauled key parts of our financial and operating systems, while adding talent to our roster and making enhancements to the platform like our Vinyl Store, D2C artist store-fronting and our data analytics.

While the company has made progress, we still haven’t reached our goals. PledgeMusic has been in discussions with several strategic players in the industry who have interest in the PledgeMusic platform. We are evaluating a number of transactions with those potential partners, and we plan to announce details of this in the next 60 days. It is our expectation that payments will be brought current within the next 90 days.

We accept responsibility for the fact that we have been late on payments over the past year. PledgeMusic is working tirelessly on this issue, and we are asking our community for their continued support and patience.

You can read Benji Rogers’ statement in full below:

To the Artists, their teams, managers, labels and fans, and to all who have been negatively affected by the issues at PledgeMusic, I am truly sorry.

When I conceived of Pledge, and when the co-founders and I started in on building the platform we thought of little else but of how it could help artists. We benchmarked the company’s success on how well our artists’ campaigns did. We didn’t sleep a whole hell of a lot as we put in the hours to make things work and build the features that our artists needed. In one sense artists drove the innovation and we viewed the platform as a place from which they could connect with their fans, make money and retain ownership over their data. As I had it in my head, Pledge was meant to be the home from which they could launch something amazing into the world, and thousands of you did just that.

Even though I handed over day-to-day control of Pledge as its CEO for the second time in April of 2016 and left the board last February, the fact that this trust is now broken is unacceptable to me personally and I am truly sorry to all of you who have been affected by this. I have emailed a lot of you from my personal email account, as I no longer have a Pledge email address, and have tried to help where I can, but it’s not enough.

As such I have been in touch with the current board and management team to offer my help both strategically and practically. If it is asked for, I will commit to doing all that I can to ensure that this wonderful engine that we created does not cause any further harm, and can grow into something even better for all who would use it.

Lastly, I would like to acknowledge the incredible team, which includes one of my co-founders, who have been battling to get the right people paid under immensely difficult circumstances both professionally and personally. They are feeling the heat, as they are on the front lines of this and are doing their very best to help you. Of that, I have no doubt.

Once again I am truly sorry to any and all of you who have been harmed as a result of what I made. Please know that I will do all that is within my power to make it right and to fix what I can if given the opportunity to do so.

Music Business Worldwide

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